California Wildfire Bill Omits Liability Cap, PG&E and Edison Tumble

RegulationAnalyst Impact 4

โดย 24/7 Wall St.·

Summary · why it matters

California utility stocks cratered Monday after state lawmakers advanced an amended wildfire bill that omits liability protections investors had counted on, sending PG&E down 18% to $13.57 and Edison International down 23% to $54.22, its largest single-day decline in over 25 years. The bill, Senate Bill 492, speeds claims payments and allows additional bonds but lacks a $6 billion per-incident cap on wildfire fund withdrawals, a mechanism to replenish the Wildfire Fund, and a proposal barring insurers from suing utilities. Sempra fell just 2% to $82.22 on heavier Texas exposure, while the Utilities Select Sector SPDR ETF dropped only 1%, isolating the selloff as California-specific statute risk. Analysts flagged uncapped tail risk: BMO cut PG&E to Market Perform with a $21 target and raised its liability drag estimate to $10 per share, while Mizuho downgraded both PG&E and Edison International, citing Edison's 30,000 claims in litigation and over $775 million in compensation offers. PG&E said the bill falls short of creating long-term durability for affordable investment, and credit rating downgrades are possible for California investor-owned utilities.